# Solve using the Contribution Margin approach. Bentley Plastics Ltd. has annual fixed costs of $450,000 and variable

## Question:

Solve using the Contribution Margin approach.

Bentley Plastics Ltd. has annual fixed costs of $450,000 and variable costs of $15 per unit. The selling price per unit is $25.

a. What annual unit sales are required to break even?

b. What annual revenue is required to break even?

c. What will be the annual net income at annual sales of:

(i) 50,000 units? (ii) $1,000,000?

d. What minimum annual unit sales are required to limit the annual loss to $20,000?

e. If the unit selling price and fixed costs remain the same, what are the changes in break-even unit sales and break-even revenue for a $1 increase in variable costs?

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